Don't Treat Your Customers Like "Leftovers"

Johanson: "What did they do? If the drinks are on them, it is because you have been seriously wronged."

Nora: "Maybe they’re just rewarding me for being a loyal customer…"

Johanson: "No, that isn’t the way the world works."

Nora: "Indeed, it is not."

Believe it or not, Patrick Johanson, not Nora Durst, represented the voice of optimism within the universe of HBO’s "The Leftovers." He, through a book he wrote, advises individuals to move on with their lives—and embrace opportunities for happiness—in the wake of a catastrophic event that instantly removed 2% of the population from the face of the Earth.

His public persona—and career—hinges on a portrait of optimism. Yet even he cannot avoid succumbing to a condemnatory perspective of the customer experience.

That speaks volumes. It also, sadly, speaks a truth. For all their talk about customer-centricity and experience optimization, businesses consistently bastardize and downplay the concept of customer retention.

We saw it with Comcast (and with numerous other cable and utilities services providers). The business’ "customer retention" effort was embodied by a poorly trained, wrongly incented agent desperately arguing with a frustrated customer who wanted to leave.

If the call had progressed more firmly in his direction or been handled more astutely and professionally, it is possible the representative would have used promises of coupons and free services to preserve the customer’s business. Ultimately, however, "customer retention" would still reflect a retroactive, last-resort process through which the business attempts to restore faith in a customer that lost it.

The same sort of attitude manifests in services like Google Play, LinkedIn, Amazon Prime and the WWE Network. The providers will offer—and aggressively market—discounts and free trials to new customers, but they rarely provide requisite value to loyal, existing ones.

If they do so, it is almost always in response to a customer’s demonstration of frustration and/or intention to leave.

The attitude is also commonplace within the restaurant sector. Consistent with Johanson’s sentiment, if a bartender agrees to comp a customer’s bar tab or a waiter brings a customer a complimentary dessert, it is typically to right a wrong. Rarely is it designed as a tactic for adding value to a loyal customer’s experience.

Those conceptions of "customer retention" were surely top of mind when "The Leftovers" writers penned the aforementioned dialogue.

Even though they not only represent lucrative repeat business but also invaluable brand advocates in today’s social media era, regular customers often find themselves treated like "leftovers" in the refrigerator of customer management.

New customers are the special dish from the exciting new restaurant. Businesses work hard—and spend hard—in pursuit of that "dish."

Angry customers are like the fine, aged bottle of single malt scotch one forgot he had in his liquor cabinet. Once the business discovers them, it jumps into action.

But until then, the business approaches its recurring customers like two-day-old Chinese food leftovers. It would feel guilty and silly to throw them away, but it is not particularly thrilled about the engagement either. As long as they can rest quietly and painfully in the refrigerator or freezer, the leftovers are worth keeping around.

That mindset needs to change. Virtually all media—from business journals to television shows like "The Office"—touts the value of retaining existing customers, but few let that value drive their action. They do not make the appropriate connection between retention efforts and loyalty and thus do not recognize the positive impact nurturing can have on the bottom line.

They forget that a customer ‘s willingness to continue doing business is not necessarily a sign of loyalty. They forget that a customer’s lack of consistent complaining is not a sign that he is consistently satisfied. As a result, they find themselves caught off-guard when a regular customer puts forth frustration or announces his intention to leave. And it is at that moment that they must turn to costly, desperate means for keeping the customer around.

And even if those efforts work in the short-term, they do not necessarily change the customer’s sentiment. That a customer is willing to except free HBO or upgraded Internet in exchange for nixing his cancellation plans is a sign that he is human rather than a sign that he is loyal to the business. If the business remains complacent in its relationship with that customer, the customer will be just as susceptible to future frustration and thus just as vulnerable to offers from competitors.

A business can continue offering retroactive "retention" bonuses, but at a certain point, that strategy will hit a wall. The customer will either become immune to the business’ pleas or become so demanding that the business would need to spend far too much money to keep him around. Either way, it loses.

A truly customer-centric—and successful—retention strategy begins from the moment a business first interacts with a customer. Whether it wins the business or not during that interaction, it always focuses on creating a positive, valuable relationship with that customer. It then focuses on maintaining—and increasing—the value of that relationship.

Instead of waiting for a customer to leave, it rewards the customer with benefits—that make sense to the customer—throughout the lifecycle of the relationship. It lets the customer know that he is not recognized as a number after a dollar sign but as a pivotal part of that business.

Instead of treating existing customers as "completed" marketing tasks, it continues marketing to them. It creates personalized messages and promotions that indicate it knows and cares about that customer. From upgrade offers consistent with the customer’s actual behavior to first cracks at new products and discounts (not offered to new customers), the business communicates that it has cannot permanently "win" a customer. It, like a groom professing his vow to a new bride, will continue winning over its customers from now until eternity.

Instead of exclusively slapping customer feedback "surveys" onto the end of support calls, it makes every moment of the customer lifecycle a learning experience. It proactively connects with customers to garner rolling feedback. It tracks social sentiment to gain a real-time perspective into the customer’s true satisfaction with the brand. It monitors buying behavior to recognize—and address—changes in a customer’s engagement level. It communicates the impact of feedback on the experience it provides each customer.

It, quite simply, recognizes customer loyalty as a fleeting, infinitely valuable commodity for which it must fight on a perpetual basis. Strategies for sucking customers in—and dissuading them when they want to leave—are only worthwhile if the business can optimize the customer’s experience while he is within the brand’s walls of engagement.

When it does that, it will not need a strategy, let alone a team, devoted to providing customers with "make goods." It will not need to aggressively fight to "win back" customers from competitors -- they never would have left in the first place.

When it does that, the entire customer experience will serve as a retention effort.

As it should.

Image credit: HBO